regional student accommodation assessment

104 Pages·2017·3.33 MB·English

by  Alex Stuart

REGIONAL STUDENT
ACCOMMODATION
ASSESSMENT

2 FEBRUARY 2018
FINAL
PREPARED FOR DEPARTMENT OF EDUCATION AND TRAINING
URBIS STAFF RESPONSIBLE FOR THIS REPORT WERE:
Director Clinton Ostwald
Associate Director Alex Stuart
Consultant Chinmay Chitale, Liam Demaine, Jack Unicomb Laird, Charlotte Blythe
Project Code PER0726
Report Number Final

© Urbis Pty Ltd
ABN 50 105 256 228

All Rights Reserved. No material may be reproduced without prior permission.

You must read the important disclaimer appearing within the body of this report.

urbis.com.au
CONTENTS
TABLE OF CONTENTS
Executive Summary ............................................................................................................................................. i
1. Introduction ........................................................................................................................................... 1
1.1. Project Background .............................................................................................................................. 1
1.2. Purpose of the Study ............................................................................................................................ 1
1.3. Definition ............................................................................................................................................... 1
2. Literature Review .................................................................................................................................. 2
3. Regional Students................................................................................................................................. 6
3.1. University Enrolments ........................................................................................................................... 6
3.1.1. Students ................................................................................................................................................ 6
3.1.2. Participation Rates .............................................................................................................................. 11
3.2. Financial Support to Regional Students ............................................................................................. 12
3.3. Average Incomes ................................................................................................................................ 22
4. Student Accommodation Supply and Demand ................................................................................... 24
4.1. Supply ................................................................................................................................................. 24
4.1.1. PBSA Bed Supply ............................................................................................................................... 24
4.1.2. PBSA Fees ......................................................................................................................................... 25
4.1.3. Private Rental Market ......................................................................................................................... 28
4.2. Demand .............................................................................................................................................. 31
4.2.1. Demand Drivers .................................................................................................................................. 31
4.2.2. Capacity to Pay ................................................................................................................................... 32
4.2.3. Benchmark Supply .............................................................................................................................. 34
4.2.4. Key Findings ....................................................................................................................................... 36
5. University Investment in Student Accommodation ............................................................................. 37
5.1. Key Considerations ............................................................................................................................. 37
5.1.1. Financial .............................................................................................................................................. 37
5.1.2. Student Attraction ............................................................................................................................... 39
5.1.3. Student Retention ............................................................................................................................... 39
5.1.4. Operational Expertise ......................................................................................................................... 40
5.2. University Case Studies ...................................................................................................................... 40
5.3. Key Findings ....................................................................................................................................... 50
6. Australian University Accommodation Policies ................................................................................... 51
6.1. University Profiles ............................................................................................................................... 51
6.2. Key Findings ....................................................................................................................................... 51
7. International Comparisons .................................................................................................................. 53
7.1. Student Accommodation Provision ..................................................................................................... 53
7.1.1. United Kingdom .................................................................................................................................. 53
7.1.2. United States ...................................................................................................................................... 54
7.1.3. New Zealand ....................................................................................................................................... 55
7.1.4. Ireland ................................................................................................................................................. 57
7.1.5. Benchmark Supply .............................................................................................................................. 59
7.2. Implications For Australia ................................................................................................................... 60
8. Options Identification .......................................................................................................................... 61
Disclaimer ........................................................................................................................................................ 63

Appendix A Regional Students living in Metropolitan Cities
Appendix B Australian University Profiles
URBIS

REGIONAL STUDENT ACCOMMODATION ANALYSIS
REPORT FINAL
Appendix C International University Case Studies

URBIS
REGIONAL STUDENT ACCOMMODATION ANALYSIS REPORT FINAL
EXECUTIVE SUMMARY
PROJECT BACKGROUND
The Commonwealth Government commissioned an Independent Review into Regional, Rural and Remote
Education in March 2017. The affordability and accessibility of university accommodation arose as a
potential issue deterring the number of regional, rural and remote (RRR) students choosing to pursue higher
education.
The Department of Education and Training has engaged Urbis to undertake an assessment of university
investment in on-campus student accommodation to support an adequate supply of affordable
accommodation for RRR students.
REGIONAL STUDENTS
The number of university students in Australia in 2016 have been estimated from de-identified data provided
by the Department of Education and Training. For the purpose of this study, enrolments have focussed on
‘mobile’ students that are studying full-time and on-campus (internal) as these students represent the
majority of demand for university student accommodation. Mobile students are defined as full-time internal
students that have to move from their previous home to study and therefore require new accommodation
(with their postcode of permanent residence 60km or more from their postcode of study).
Table E.1 outlines the number of international, domestic metropolitan and domestic regional students in
2016 who are considered to be ‘mobile’ and therefore requiring student accommodation in proximity to their
place of study. Key findings include:
• Approximately 70% of mobile students in Australia are international students, which highlights the
significant impact that the international sector has had on the demand for student accommodation in
Australia.
• Students originating from regional areas in Australia are more mobile, with 56,028 (50% of total regional
students) students most likely having moved. This highlights the greater need for assistance in
relocating for RRR students. Of the mobile RRR students, around 75% have relocated to capital cities to
study indicating there is significant demand for student accommodation in the capital cities.
• Students originating from metropolitan areas are significantly less mobile than RRR students, with
29,620 (7%) students considered mobile. This is reflected with the majority of metropolitan students
choosing to study locally and stay at home while they study.
Mobile University Students, Metropolitan vs. Regional
Australia, 2016 Table E.1
Place of Origin
Campus of Study Metropolitan Regional International Total
Metropolitan 21,341 42,282 199,022 262,645
Regional 8,278 13,747 17,048 39,073
Total 29,620 56,028 216,070 301,718

Note: Mobile students are defined as full-time internal students including international students studying onshore and domestic students
where their postcode of permanent residence is greater than 60 km from their postcode of study.
Source: Department of Education and Training, Urbis
The tertiary education sector is experiencing technological disruption with advancements is digital
distribution, providing greater access to university courses online. The proportion of students from regional
areas that are studying on-campus has decreased from 80% in 2006 to 63% in 2016. The 17-percentage
point decline is higher than the 10-percentage point decline in the proportion of metropolitan students
studying on-campus. This highlights the greater proportion of students from regional areas that have taken
advantage of online learning to complete their tertiary education, which has had an impact on the demand for
student accommodation with a higher proportion of students likely choosing to stay at home while completing
their studies.

URBIS i
REGIONAL STUDENT ACCOMMODATION ANALYSIS REPORT FINAL EXECUTIVE SUMMARY
FINANCIAL STATUS
Based on average income data from the 2016 Census and sources of income from the Australian University
Student Finances Survey 2012, the average income for a domestic full-time student (aged 19-24) in 2017
was estimated to be $20,115 including all forms of income including paid employment, scholarships,
government allowances, family allowances and other income. Key sources of income include:
• Government Allowances: The Australian Government provides students with access to a number of
financial support programs including Youth Allowance, ABSTUDY, rent assistance, Student Start Up
Loans and scholarships. A single student receiving both Youth Allowance and rent assistance would be
receiving up to $285 per week.
• Work: According to the ABS Census, the average full-time student in Australia (aged 19-24) was working
15 hours per week in 2016.
• Family Allowances: The Australian University Student Finances Survey 2012 indicated that a large
number of students are receiving family support. Consultation with university accommodation offices
indicates that a high proportion of students living in student accommodation (especially first year
students) are receiving family support to pay for accommodation and other living expenses.
• Scholarships: There are a range of scholarships and bursaries offered by universities that provide
financial support to students.

STUDENT ACCOMMODATION SUPPLY
The Urbis Australian Student Accommodation Database comprises comprehensive information regarding
purpose built student accommodation (PBSA) facilities across Australia. There is currently a total supply of
around 88,400 PBSA beds in Australia (defined as purpose built facilities with more than 20 beds that target
tertiary students). PBSA facilities located in Metropolitan areas across Australia represent 82% (72,281) of
the total PBSA bed supply. Facilities located in regional locations across Australia represent 18% (16,093) of
the total supply of student accommodation beds.
For the purpose of this assessment, Urbis has classified student accommodation into four major categories
including:
• University: University owned and operated facilities that are generally located on the campus. University
facilities represent 36% (31,456) of the total supply of student accommodation beds across Australia.
These facilities include a mix of fully catered halls with bedrooms and shared amenities off a hallway to
self-catered apartment style accommodation.
• Private: Facilities that are privately owned and operated and are not located on a university campus or
have an affiliation with a university. Private facilities comprise 28% (25,059) of the total supply of student
accommodation beds across Australia. The majority of these facilities are self-catered apartment style
accommodation providing residents with more independence.
• Joint Venture: Facilities where both the university and private sector have a stake in the project. This
includes private developments on university land and university owned facilities that have a management
agreement with a private sector firm. Joint venture facilities comprise 22% (19,063) of the total supply of
student accommodation beds across Australia.
• Colleges: These are generally older colleges that are affiliated with a university though operated by an
independent organisation that is often religiously affiliated. The majority of these facilities comprise
catered accommodation with rooms off a hallway with shared bathrooms, kitchens and common area. It
is also noted that the buildings tend to be older due to the history associated with these colleges though
some of the colleges have built new buildings in recent years, a number of which represent more modern
independent living models targeted at older and post graduate students. Colleges comprise 14%
(12,996) of the total supply of student accommodation beds across Australia.

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EXECUTIVE SUMMARY REGIONAL STUDENT ACCOMMODATION ANALYSIS REPORT FINAL
PBSA Supply by Type and Location
2017 Table E.2
University Joint Venture College Private
On- Off- On- Off- On- Off- Off-
Region Total
Campus Campus Campus Campus Campus Campus Campus
Metropolitan Campuses 15,292 2,521 16,391 2,151 9,831 2,015 24,080 72,281
Regional Campuses 12,991 452 521 0 1,150 0 979 16,093
Australia 28,283 2,973 16,912 2,151 10,981 2,015 25,059 88,374

Source: Urbis Student Accommodation Database 2017
With over 300,000 mobile university students and 88,400 PBSA beds, the majority of students are living in
private rental accommodation. Based on Urbis’ experience in student accommodation throughout Australia,
a high proportion of students are living in share houses with 3-4 bedrooms.
STUDENT ACCOMMODATION DEMAND
Economic modelling was undertaken to assess the capacity of students to pay for accommodation (both on-
campus university accommodation and private rental accommodation). The analysis is provided for
illustrative purposes to highlight the situation for an average student in Australia.
The average annual expenses (excluding rent) for a domestic full-time student in 2017 was estimated to be
$14,165 for a student living in the private rental market. This includes accommodation costs such as house
supplies, utilities, internet and transport to the campus. With students generally having to sign a 12-month
lease, this leaves $5,951 for rent, equating to capacity to pay $114 per week. This is marginally higher than
the average three bedroom rent of $112 per room indicating few students would be saving money. With a
large number of students living in the inner areas of capital cities paying considerably more rent than this, it
highlights the rental stress facing students and the large number of students going into budget deficit.
Students living in on-campus accommodation don’t have the same number of extra costs as private rental
students such as house supplies and utilities being included in the rent and not having to pay for travel to
classes. However, there are often some compulsory fees associated that have to be paid. As such, an
average domestic full-time student could afford to pay a higher rate of $178 per week over a 46-week
contract period assuming they went back home to live over the summer break. The average cost of self-
catered on-campus accommodation in Australia is $222 over a 46-week contract period, which is 24% higher
than the average student’s capacity to pay. This reflects the additional benefits of living in university
accommodation such as pastoral care and social events though also highlights why the majority of more
independent continuing domestic students choose to live in share houses in the private rental market.
It is noted that the data below is based on a student earning the average income in Australia. More than half
of full-time students are earning less than the average income with a large proportion of these likely to be
facing significant financial pressure if they are living away from home. The differential is estimated to be over
50% in Sydney and Canberra due to more expensive rental markets and highlights that the capacity to pay
pressures for RRR students are highest for those moving to capital cities.

URBIS iii
REGIONAL STUDENT ACCOMMODATION ANALYSIS REPORT FINAL EXECUTIVE SUMMARY
Capacity to Pay for Accommodation
2017 Table E.3
Self-Catered On- Private Rental
Campus PBSA Accommodation
Total Average Income $20,115 $20,115
Expenses
General Expenses* $9,462 $9,462
Study Expenses^ $2,191 $2,191
Accommodation related costs (excluding rent)
- House supplies $0 $354
- Utilities $0 $932
- Transport to campus $0 $1,226
- Compulsory PBSA levy $258 $0
Total Expenses (excluding rent) $11,911 $14,165
Capacity to pay for Accommodation (Annual) $8,204 $5,951
Average Contract Period (weeks) 46 52
Capacity to pay for Accommodation (Week) $178 $114
Average Weekly Tarriff $222 $112
Differential between Average Rent and Capacity 24% -2%
Note: Income is based on 2012 Survey data and indexed to 2017. Income includes all sources of income including Government support
though excludes family allowances.
Note: * Includes food, medical, transport, entertainment, childcare and other expenses.
Note: ^ Includes textbooks, stationary, computer, university fees and other study related items.
Source: Australian University Student Finances Survey 2012; ABS, Urbis

AUSTRALIAN UNIVERSITY ACCOMMODATION POLICIES
Ten Australian universities were profiled to identify how they approach the provision of student
accommodation for RRR students focussing on the supply of accommodation and allocation policies. Key
Findings include:
• Accommodation guarantees vary between universities with three out of the ten profiled universities
offering some type of accommodation guarantee. The guarantees generally focus on first year students
who are coming from outside the region.
• The majority of universities don’t provide preferences to RRR students in securing accommodation with
universities operating on a largely ‘first in’ basis. Accommodation offices generally prefer to attract a
large number of returning students as this assists in building a strong sense of community in
accommodation and helps set an example for commencing students. As such, returning students are
often given preferences to reapply for accommodation before the process is opened to new applicants.
• All of the universities profiled offer bursaries, scholarships and other financial aid for students with many
universities offering specific aid to RRR students. Housing bursaries and rent assistance are offered by a
number of universities and priority is often given to those who are relocating from interstate or regional
areas.
• All universities provide financial assistance and scholarships targeted towards indigenous students.
Through the consultation phase to prepare the profiles, it was identified that there may be opportunities
to encourage more indigenous students to choose student accommodation through the expansion of
programs to help indigenous students feel at home in purpose built student accommodation.
AUSTRALIAN UNIVERSITY ACCOMMODATION INVESTMENT
Universities are experiencing competing pressures for capital expenditure with accommodation often seen
as a commercial opportunity that could generate revenue for the university or at least have the
accommodation being self-sufficient with revenues covering operational expenses (and capital
maintenance).
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EXECUTIVE SUMMARY REGIONAL STUDENT ACCOMMODATION ANALYSIS REPORT FINAL
Following the recent student accommodation transactions entered into by the University of Wollongong, the
Australian National University and University of Tasmania with private sector consortiums, there are more
universities actively looking into opportunities to partner with the private sector to facilitate the development
of new student accommodation and the upgrade of existing accommodation without having to provide
capital. This has the added attraction of generating an upfront payment to the university that can be used for
other projects. One of the challenges faced by universities is weighing the need to provide affordable
accommodation to RRR students against the need to charge higher accommodation rents to justify the new
construction costs and generate the desired financial outcome to the university. A key factor in these
transactions is also the liability to the university such as the provision of occupancy guarantees as these can
impact how the development is treated on the university’s balance sheet and therefore have flow on financial
impacts.
Universities are willing to borrow money to invest in new infrastructure though actively monitor how much
they borrow to stay within statutory requirements and to maintain credit ratings. Due to the availability of
private funding, universities have reduced the amount of debt they use to fund student accommodation with
some recent transactions with the private sector being used to pay down existing loans.
Universities are also looking at other opportunities to fund student accommodation such as philanthropy with
the Australian National University having recently received a donation of $100 million to develop 800 student
accommodation beds.

OPTIONS
Based on the analysis of university student accommodation, the following options have been identified for
further investigation with the aim of improving the accessibility and affordability of university student
accommodation for RRR students. These options comprise:

Challenge Potential Response(s)
Prospective RRR students looking to Reviewing eligibility criteria for RRR students to access
enter tertiary education can experience Government support such as Youth Allowance. This could
some difficulties in receiving potentially involve reducing the parental income tests for RRR
Government assistance such as Youth students that need to relocate to study at university or
Allowance. This includes the parental providing more assistance to RRR students in navigating the
income test, which reduces the available application process.
payment for students whose parents
exceed the income threshold.
Consultation with some university
accommodation managers provided
anecdotal evidence that there are RRR
students unable to receive Government
support.
Prospective RRR students applying for There is an opportunity to review the application process for
Government financial assistance need Government assistance to see whether the timing of
to go through a process to apply and get applications and initial payments could be revised to reduce
approved for assistance. Consultation upfront costs.
with some university accommodation
managers provided anecdotal evidence
that there are RRR students that do not
receive their first Government payment
until March indicating many need to
borrow money to meet upfront costs
such as relocating, upfront rent, bonds
etc.
URBIS v
REGIONAL STUDENT ACCOMMODATION ANALYSIS REPORT FINAL EXECUTIVE SUMMARY
Challenge Potential Response(s)
RRR students can face challenges in Universities could be encouraged to provide an allocation of
securing affordable on-campus beds to RRR students with this policy actively marketed to
accommodation especially at RRR students to give them confidence that they can secure
universities where there is strong on-campus accommodation. This is similar to the strategy
competition for the more affordable on- adopted by the University of Newcastle which allocates 100
campus accommodation. rooms to students from the New England region and 80 rooms
from students from the Central West region. This policy is
actively communicated in their marketing at schools in the
regions to grow enrolments.
There is potential for Government relocation scholarships for
RRR students to be linked to universities providing an
allocation of affordable beds to these students. This may
involve the scholarship money (either all or part) to be used at
the university’s accommodation so the student would benefit
from reduced accommodation costs in the first year (especially
helping with the upfront costs) and the university would benefit
from the students being incentivised to choose their
accommodation, which would ideally boost occupancy and
revenue. This would be attractive to some of the universities
that are experiencing vacancies in their accommodation.
The universities that already have full occupancy of
accommodation may also be enticed to participate by
additional funding for the scheme such as assisting with
marketing to RRR students.
There is potential for an allocation scheme to be expanded to
all equity groups such as lower socio-economic status,
disability and indigenous students with RRR students
representing a component of the program.
Indigenous students face specific challenges such as having
close cultural/community ties can make it difficult to leave
home. As such, there is opportunities for student allocations to
include wings dedicated to Indigenous students and cultural
spaces to assist them in developing cultural support networks.
There may also be opportunities to tie in with other
government funding such as the Higher Education
Participation and Partnerships Program with the allocation of
beds to lower socio-economic status RRR students to boost
student retention.
Older student accommodation facilities There is the potential to make regional infrastructure grants
at some regional universities are in need and funding available to regional universities to help fund
of upgrading and some regional upgrades of existing accommodation and new facilities.
universities do not have the financial
It would be recommended that any grants be tied to a business
capacity to fund upgrades. As such,
case to determine if the new investment would help boost
there are buildings that are in need of
demand for student accommodation and achieve other desired
upgrade to improve the student
socio-economic outcomes.
experience.
This funding could be linked to universities providing an
allocation of affordable beds to RRR students or other ‘equity’
students such as lower socio-economic status, disability and
indigenous students.
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EXECUTIVE SUMMARY REGIONAL STUDENT ACCOMMODATION ANALYSIS REPORT FINAL